Over the years I’ve come up with what I call a price increase formula. I have never had a bookkeeping client object to my rate increase since I began implementing it. I discovered that the key was to be prepared. I recommend that you script out what points you want to cover in a verbal conversation as well as written communication in the form of an email or letter.

Start off with what you’ve accomplished since you’ve been working together. This is not every single little thing that you’ve ever done. If you’ve been working for a client for several years you can reference some big things that you’ve done together.

Next, let them know there will be an increase. Do this at least 45 days out. It’s only fair to set a date in advance so that your client doesn’t feel like you’re pushing this on them at short notice.

There are two ways to communicate the increase depending on what you think will work best with your client’s personality.

• One way is to give them the incremental piece. If you’re doing packages, you can say, “Effective January 1st there will be a slight increase to your monthly fee of $75 per month.” If you are doing an hourly rate increase you can say, “There will be a $15 per hour increase.”
• The other way to represent it is to do the full increase. You can say, “Effective January 1st your new rate will be $XX.” That’s it. It’s a very simple sentence. Keep it short, sweet and clean. You don’t have to justify why you’re increasing your rates. We are a professional services firm. That’s the end of the conversation.

Next, tell them how much you enjoy working with them and invite them to ask questions. Simply say, “Do you have any questions or concerns?” Do not be afraid of that conversation. This does not mean that you have to cave and not increase your rates.

This is the part of the conversation that reveals why you must first do some internal work. If you don’t, it’s at this point that you’ll allow your boundaries to slip. Without the proper mindset going into this conversation, you’ll lose your courage.

If they ask, “Why are you increasing your rates?” you can say, “I’m raising my rates to stay competitive and bring you the best resources. I pay my people well in order to do that. That’s evident in the services that we provide to your company. Would you agree?”

End by recapping how much you enjoy working with them and that you want to continue working with them. If you’re writing the letter first, include those two things in that last paragraph, “We really enjoy working with you. It’s been exciting seeing your business grow. I invite you to set up a time to speak with me if you have any questions.”

This is the basic formula I’ve used, and taught other bookkeepers to use, to successfully increase rates. You might send the letter first and then have the conversation, or visa versa, depending on what you think the particular client would appreciate. Make sure to do both.

Having this money conversation can be one of the hardest things a freelance bookkeeper does. That’s why so many bookkeepers and accountants are gathering at The Bookkeeper’s Club. We’re a community that supports each other, gives valuable feedback, and teaches processes so you can confidently make your bookkeeping business productive and profitable.

When I’m feeling this way, it is so easy to create situations to further prove to myself I am unsupported and thinking I need to do everything myself.  (Remember, thoughts become things – so why do we choose the ones that make our lives more difficult?)  In this particular mastermind session, I was questioning yet again whether or not to proceed with a certain aspect of my business that was clearly not providing me with the results I desired and had not been for well over three years.  I was beyond the point where I had the luxury of continuing to invest money to make this venture successful, yet I continued to do this month after month and complain about it!

On a logical level I knew it was not working, but on an emotional level I was still in denial.   What I can liken it to, is you don’t realize how much weight you’ve gained until you see a picture of yourself.  As you look at the picture you gasp and think, “Why didn’t I see before?  I look in the mirror every day!”  It’s only when you are able to recognize the situation that you can do something about it.

I was holding on so tightly not because I had to prove I was right about how successful this area of my business could be, which I still believe it can. (Perhaps a little residual denial still left over? J)  I was holding on so tightly because it was keeping me safe.  By focusing on this area of my business, I was occupying myself with busy work that wasn’t producing consistent results.  The busyness kept me blind to the truth and the only way the Universe could get my attention was to stop the flow of money.

Money Muscle Strengthener

Most of my life lessons have shown up and been taught to me through money.  This may or may not be the case for you.  Your lessons may show up in relationships, with food, being a workaholic, etc.  No matter how they show up, they all have one thing in common – we are not being emotionally authentic with ourselves and showing that authenticity to the world.

The question I asked myself is, “How can I recognize when I’m not being authentic before the money stops flowing?”  For me, the answer is creating a way in which I can check-in with myself and tune into how I am feeling.  By doing this each day, I am able to recognize the fear, acknowledge it and move through it.

How I do this is to stop what I’m doing, close my eyes and breathe – it’s that simple and the beautiful part is that I can do that as many times as I need to throughout the day!

Your check-in can take the form of:

• Going for a walk and listening to nature
• Journaling
• Taking yourself out for lunch, to a movie, for tea
• Closing your eyes and feeling your toes
• Yoga
• Cooking

Checking in with ourselves doesn’t have to be big, loud or complicated.  It just has to be.  I’d love to hear how you check-in with yourself.  You can do so by leaving me a comment.

He doesn’t like dogs and wants absolutely nothing to do with them.  Has this swayed Julia?  That would be a big resounding NO!  It has only made her more determined and she is taking a no excuses approach to the whole situation.

Over the past couple of weeks, Julia has not only gotten Connor to come over and visit the dogs with her, but he now pets them and plays ball with them.  At eight years old Julia assessed the situation, planned a course of action and executed her plan – no excuses!  There is still a ways to go until Connor is 100% comfortable with having his own dog, but she is well on her way to reaching her goal.

So what does this have to do with the Money Conversation?

The Money Conversation is the process each business owner follows that creates a straight path between the money they are paid for the services they provide or products they sell.  That straight path consists of establishing boundaries within which your business operates (process), communication of those boundaries (courage), and believing you deserve to be richly compensated (self-worth).

If we are telling ourselves:

• I can’t get out of debt because I don’t have enough money right now.
• With this economy, there isn’t any business to be had out there.
• All I’m getting out of going to networking events is an increased waistline.

We are letting excuses (a.k.a. fear) keep our world small.  Excuses are well-planned lies we tell ourselves that keep us from moving forward.

Last year my thyroid went out of whack and I put on a considerable amount of weight.  Thyroid disease is not something new to me.  I was diagnosed more than 15 years ago and all that time I managed to keep the weight off.  (I have the one with the slow metabolism.)

So what was different last year?  Why was I gaining weight?

I was making excuses as to why I could not lose the weight convincing myself it would not work.  As soon as I changed my mindset and took a no excuses approach, guess what magically happened?  The weight came off!

Things only change when we are at that place where we make and take no excuses.  Our thoughts become things and what we think manifests in our lives.  So if you…

• Desire to be out of debt, think and believe the amount of money you receive right now is enough.
• Truly want new business, create your own economic reality.  During the Great Depression vast fortunes were made (and lost).
• Believe you will make two good connections that will either become business or lead to business for each networking event you attend.

As Mike Dooley says, “Thoughts become things.  Choose the good ones.”

By Linda A. Hunt, The Small Business Money Mentor

My good friend and business colleague Sue (name has been changed for confidentiality purposes) called me freaking out about money! She was having a mini meltdown and could not figure out why. Here’s what happened….

On Monday she sent an invoice to her friend and colleague who said she would pay the bill “in a couple of days.” A couple of days passed and Sue had not received the payment which was resulting in the mini meltdown and phone call to me. To get to the bottom of what was really going on, (because  when we are experiencing a challenge around money, it’s never just about the money) I began asking Sue a couple of questions:

• Are you worried she won’t pay you? No, was her response.
• Are you waiting on the money because you need it? Again, no!
• Did you clarify what a couple of days meant to your client? No.

As I had suspected a “great expectation” had been set up in Sue’s mind which had not been met and was causing Sue’s mini-meltdown. Whenever we are experiencing a challenge around money it can be traced back to one or a combination of three life lessons: soft boundaries, inability to take a stand for your needs and low self-worth.

Usually one of these culprits will take center stage. In Sue’s case self-worth was front and center. Let’s take a closer look at why….

You see a couple of days meant two to Sue, at the most three. When the payment she had expected to arrive on day two did not, those gremlin voices in her head began whispering and getting louder and louder….

• Why hasn’t she paid me yet? She said she would.
• Oh my, what if she’s not happy with the service I provided her and has decided not to pay?
• What I did for her wasn’t good enough, that is why she hasn’t paid me yet.

Those negative voices we hear inside our heads are the voice of fear and can be really good at pushing our buttons and making us doubt ourselves. How could all of this have been avoided?

By having The Money Conversation….

When Sue’s client said she would pay her in a couple of days instead of assuming that meant two days, Sue could have:

• Stated her invoice terms – due upon receipt, net 7 – whatever they may be up front instead of leaving it open-ended, or;
• Asked exactly what her client considered to be a couple of days.

Either of those actions would have helped Sue avoid her mini meltdown. You might be wondering why I did not suggest Sue simply contact her client. Sue was emotionally charged and it is usually not a good idea to follow-up on a situation until you can place a little distance between yourself and your emotions. What we did do is together decide that if Sue had not received payment by the next day, she would email her client.

Money Muscle Strengthener

The other action we took is to clearly define Sue’s credit policy for her company. A credit policy is the blueprint your company uses when deciding to extend credit to a customer. It outlines the methods (cash, check, credit card, etc.) under which your company accepts payment, the terms by which that money is due, to whom you will extend  credit, etc. Having her credit policy clearly defined supports Sue in communicating terms with her clients and the steps she is to follow when those terms have not been met. Having a standard process in place diffuses the potential of a situation becoming emotionally charged.

So what does this have to do with your relationship with money? Simply, that our thoughts and beliefs about things and situations are formed from the environment that we were raised in and can sometimes be referred to as “heritage beliefs”.

A heritage belief is a thought pattern about a thing or situation that we inherited from previous generations – familial or societal.  They are neither good nor bad, just not necessarily true for you and sometimes they are not even conscious.

Recently I was driving to a meeting thinking about several projects I have in the works for my business and the associated cost when I heard my inner voice say, “In order to get what you want, you have to spend money.”  That statement, from my inner voice, stopped me in my tracks because it was not mine – it was my Dad’s.  It was a belief that he had about money that had been subconsciously (until yesterday) mine.  Without realizing it I was living and breathing his truth about having to pay for what he wanted, not mine!

As a child, my cousin was conned into giving her dimes to her older brother in exchange for nickels.  He convinced her that the nickels were worth more because they were bigger in size.  To this day, my cousin believes that the bigger the item, the more it is worth.

Our heritage beliefs effect our interaction with money whether we realize it or not. Uncovering our heritage beliefs as they relate to money (or anything else) is like peeling back the layers from an onion.  You have to start with the outer most layers and work your way towards the center.  I can share with you, I am halfway through the layers of my onion and working through each layer strengthens my relationship with money.

Your Money Alignment Exercise

To begin peeling back the layers of your onion, think about your answers to the questions below.  They will help you to begin to understand the heritage beliefs you have formed around money and determine whether or not they are true for you today.

1.  As a child, what were you taught was the most important thing about money?  Did you adopt this idea or rebel against it?

2.  As a child, when have you been positively moved by money?  For example, you bought a toy with your allowance or you shared your money with a friend so you could both get ice cream.

3.  As a child, when have you been negatively moved by money?  For example, when you had to share your birthday gifts with your siblings before you even had the chance to play with them.

Do you need to get to the root of your money “issues” so you can run a healthy, profitable business? I’ll let you in on a secret… I’m working on a brand new book that will dive into your very personal relationship with money. Until then feel free to schedule a free 30-minute consult with me and learn which of new coaching programs will be right for you.

As an owner of a bookkeeping business, you’re constantly dealing with money, your own or your client’s.  The relationship with money is a fragile one and there are innumerous ways in which it can become out of balance. When it’s out of balance, emotions are always attached – some of the more common emotions around money are guilt, shame and anger.

So let’s start to dispel some of the emotions around money.  Money is a transaction tool that’s given in exchange for a service or product. It’s neither good nor bad.  It’s something given for something received – a balanced relationship. 

For me personally, hitting my pocketbook is how the Universe gets my attention.  When my cash flow stagnates it has nothing to do with my earning potential (I know how to make money) and everything to do with my self-worth.

So I thought I’d share with you 7 tips that help create a healthy relationship with money.

1. Create a positive mindset.  Every time you feel your mind placing more weight on the negative than the positive PAUSE and BREATHE.  Then do something that lightens your mood even if it’s something as silly as creating a money song and dance.

2. Keep a money journal.  Track all your money inflows, actual money coming in, any type of savings you experience or money you find.

3. Be in a place of gratitude.  Reminding yourself of the wonderful people and things you have in your life is one of the keys that lead to abundance and prosperity.  Don’t let guilt or feelings of being undeserved overshadow your ability to express gratitude in a meaningful way.

4. Create a budget, not just daily, or even monthly.  You’re wasting your time if you’re not also focusing on the vision of your business, as it will be when it’s fully developed.  It’s your commitment to the future.  This will help you establish a pattern of profits and sales that will get you to this goal in the time frame that you’ve set.

5. Don’t trade dollars for hours.  This is often the hardest lesson to learn, but the money you charge is based on the value of your years of education and experience.  Not the time spend on preparing their accounts.

6. Don’t operate from a place of fear.  If you’re desperate you’ll agree to whatever a prospective client wants, including discounting your rates or agreeing to provide services you’re not comfortable providing.  Instead, teach the client how to work with your business in your initial conversations.  Plainly communicate what your services are and what you expect to be paid.

7. Only be responsible for yourself.  Don’t try to fix your clients financial difficulties unless they specifically ask you.  If they’ve only mentioned that they’re having financial difficulties, it’s not your responsibility to offer to change the level of service you provide.  You’d be making the decision for them that they can’t afford your bookkeeping services.

For me, my root issue is feeling supported.  When I don’t feel supported, I don’t feel safe and those are the feelings I am sending out into the Universe further perpetrating the experience. Money is repelled by negativity.

If you’d like ongoing support from me and fellow freelance bookkeepers take a look at the new Bookkeeper’s Club. (To take advantage of charter pricing make sure you sign-up before the end of 2010.)

Over the weekend I attended the sneak preview of the movie Secretariat.  The movie is based on the spectacular journey of the 1973 Triple Crown winner and it’s owner Penny Chenery. Secretariat won the last race at Belmont by an amazing 31 lengths, increasing his speed every quarter mile.  It is arguably the greatest horserace of all time.

This is a great story and wonderful movie, yet as I sat watching, knowing the outcome – Secretariat wins, there are no adverse circumstances or dirty dealings to overcome.  I sat there on the edge of my seat waiting for the other shoe to drop!  I kept thinking “Oh, my God something bad is going to happen!”

This of course got me thinking.  Why was I waiting for the other shoe to drop?  Why was I expecting something bad to happen?  It was one of my limiting beliefs rearing it’s ugly head once again. 

Limiting beliefs are like thieves in the night that literally can stop us in our tracks. Some of those beliefs are more costly than others Sometimes those beliefs stop us just short of reaching something we’ve desired because we think we don’t deserve it.   Sometimes we aren’t even aware they exist. 

In this case I was fully aware, conscious I was waiting for the other shoe to drop and this was causing me to feel a whole array of emotions – anxious, happy, nervous, confident, panic, anticipiation.  Being aware of what you’re feeling is the first step to changing your thoughts. Our feelings are clues to unlocking our limiting beliefs.  Change your thoughts and the feeling must follow.   So what does this have to do with the money conversation?

Money will always match your mindset.

The direction of your thoughts and the explanations you give yourself are extremely important in determining if you will attract or repel money.  When a money challenge shows up in our lives it’s never about the money.  It’s underlying cause results from fear – whether real or imaginary.  I realized I was experieincing residual fear waiting for the other shoe to drop from a situation that happened over two years ago!

Money is a symbol used to get our attention.

The first step to attracting money is to understand and alter how you think.  You must align your mind with who you want to be and where you want to go, long before you become it.  And even though during the movie, while I was waiting for the other shoe to drop was not directly related to a situation with money, it 100% was.  This line of thinking is self-sabatoging and if not dealt with will show up as a money challenge at some point in the future – near or distant`.

The only thing we are ever dealing with is a thought and a thought can be changed.  The point of power is in the present moment.  All of this is like peeling an onion.  Every time you work through one layer another appears.  Getting past a limiting belief means exposing them to the light of day and examining if and why they are valid – 99.9% of the time they aren’t.

P.S.  If you get the chance go and see Secretariat in the theatre. 

~Brian Koslow, 365 Way to Become a Millionaire~

~Stuart Wilde~